During 2012, Bernard Inc. constructed a new factory. Bernard used its current employees to build the factory. Building material costs for the new factory were $2,700,000; total labor costs were $1,400,000; total company overhead was $7,500,000 (20% of which could be assigned to the new project); and interest paid on a new construction loan for the project was $750,000. What was the total cost of the self-constructed factory?

Question

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The total cost includes building materials ($2,700,000), labor costs ($1,400,000), 20% of overhead ($1,500,000), and interest on the construction loan ($750,000), totaling $6,350,000.